The Bank of Canada implemented a 0.25% increase in its target for the overnight rate, bringing it to 5%. This adjustment signifies a shift towards a more restrictive monetary policy with the objective of addressing inflationary pressures.

Mortgage costs for individuals with variable rate mortgages will see a rise. The mortgage rate for variable rate mortgages and secured lines of credit will increase by 0.25%, translating to an additional approximate monthly payment of $16 per $100,000 borrowed.

Global financial circumstances have become more restrictive, with bond yields on the rise in Canada, the US, and Europe. This trend has been influenced by major central banks indicating the necessity for additional interest rate hikes as a measure to tackle inflation.

Elevated bond yields have resulted in an upward movement in all fixed mortgage rates. This presents a difficulty for individuals with maturing mortgages, as they will face the task of renewing their mortgages at significantly higher rates.

The economy has exhibited stronger-than-anticipated growth, especially in the United States, which serves as Canada's primary trading partner. Although global inflation is showing signs of easing, persistent and resilient inflation is being fueled by strong demand and tight labor markets.

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